The Bharat stock market witnessed a robust buying spree on Monday, January 29, as both key indices, the Sensex and the Nifty 50, surged by nearly 2 percent each. This surge was attributed to positive global cues. However, the market is currently experiencing strong volatility in anticipation of the Interim Budget 2024. The Bharat VIX, a measure of market volatility, jumped 13 percent on Monday. Investors are also closely monitoring the upcoming US Fed policy decision on January 31, along with Fed Chair Jerome Powell’s commentary.
The upcoming Interim Budget on February 1 is not expected to bring major announcements, as it will be a Vote on Account ahead of the General Elections 2024. Economists and market experts anticipate the government to maintain fiscal consolidation and continue focusing on infrastructure and manufacturing. Similarly, the US Fed is expected to keep interest rates unchanged, but experts hope for a dovish tone from the Fed Chair due to easing inflation pressures in the US.
Despite these significant events, market analysts believe that they are unlikely to have a major impact on market sentiment. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “The Budget will be a Vote on Account without major announcements capable of impacting the market. Regarding the Fed decision, no rate cut is expected, but the commentary will be keenly watched.”
On Monday, the Nifty 50 opened at 21,433.10 and closed at 21,737.60, gaining 385 points or 1.80 percent. The Sensex opened at 70,968.10, closing at 71,941.57 with a gain of 1,241 points or 1.76 percent. Notably, only five stocks – ITC, Infosys, JSW Steel, Tech Mahindra, and TCS – ended in the red.
Both mid and smallcap indices also recorded healthy gains, with the BSE Midcap index rising 1.68 percent and the Smallcap index ending 1.03 percent higher. The overall market capitalization of BSE-listed firms increased from nearly ₹371.1 lakh crore to ₹377.2 lakh crore in a single session, making investors richer by about ₹6.1 lakh crore.
In terms of individual stock movements, ONGC, Reliance Industries, and Coal India emerged as the top gainers in the Nifty 50 index, while Cipla, ITC, and Infosys were the top laggards.
Sector-wise, most indices showed strong gains, with the Nifty Oil & Gas index jumping 5.18 percent and the PSU Bank index rising 2.43 percent. The Nifty Bank index increased by 1.28 percent, and the Auto index saw a jump of 1.68 percent. The only exception was the Nifty FMCG index, which ended down 0.14 percent, while the Media index remained flat.
Vinod Nair, Head of Research at Geojit Financial Services, highlighted the optimistic environment surrounding the interim budget and noted that investors are closely watching the upcoming Fed policy for cues on future rate paths.
From a technical perspective, Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, pointed out that the Nifty breached the previous swing high, signaling a potential consolidation phase with a range of 21,200 to 22,000.
In conclusion, the Indian stock market is navigating through a volatile period, with global and domestic factors influencing investor sentiment. The market remains optimistic amidst the uncertainty, with attention focused on key events such as the Interim Budget and the US Fed policy decision.
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